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The Bangko Sentral ng Pilipinas’ (BSP) unrealized gains climbed to ₱1.209 trillion as of the end of October 2024 – the first time it hit the ₱1 trillion mark – due to its participation in the foreign exchange market as a net seller of US dollars.
Based on BSP data, the unrealized gains, which under the BSP law is referred to as revaluation of foreign currency accounts, are 60 percent higher compared to the same period in 2023 of ₱756.1 billion.
For 2023, the BSP registered unrealized gains of ₱800.75 billion, up by 16.17 percent compared to ₱689.25 billion in 2022.
To ensure exchange rate stability, the BSP maintains a presence in the spot market to manage volatility. As of the first week of February 2025, the peso was trading at ₱58 to the US dollar.
As far as BSP spot market intervention is concerned, BSP Governor Eli M. Remolona Jr. has said that the central bank does not intervene on a daily basis. They only enter the spot market when the peso is under stress and there is evidence of “dysfunction” in the peso-US dollar market.
The revaluation of the country’s international reserves is literally the unrealized gains from the fact that the peso has depreciated.
The BSP books unrealized or realized gains or losses based on changes in price and exchange rates.
The BSP has a flexible and free-floating exchange rate policy, which means it is market-determined. However, it is prepared to participate in the spot market to ensure orderly market conditions and to reduce excessive short-term volatility.
As of end-October 2024, the BSP reported a net income of ₱113.1 billion, up by 423.6 percent from the same period in 2023 of ₱21.6 billion.
Meanwhile, the BSP reported net gains from foreign exchange rate fluctuation of ₱31.4 billion, lower compared to the previous year’s P51 billion.
The BSP registered total assets of ₱8.192 trillion as of end-October last year, up by 9.5 percent from the same time in 2023 of ₱7.483 trillion. BSP assets are boosted by the country’s international reserves and central bank holdings of domestic securities.
The central bank’s total liabilities grew by 7.6 percent to ₱7.925 trillion compared to ₱7.363 trillion in 2023. Total liabilities are higher due to more currency in circulation, obligations from reverse repurchase facility, and revaluation of foreign currency accounts or unrealized gains.
The BSP is one of the mandated seed funders of the Maharlika Investment Corp. Despite being unable to build up its capitalization because the sovereign fund diverted its dividends as seed money, the BSP seems comfortable with its income and accounts because it has substantial unrealized gains.
